Look there’s been a lot of talk about cryptocurrency and Bitcoin as an investment and money floating around back and forth between all these different investments and even outside of a pure investment there’s been a lot of scams. Many people have been scammed and defrauded out of their money for fake crypto investments. A lot of this comes from social media. Also, a lot of it comes from unsolicited emails to a person claiming that they have this great investment you put money in and you’ll double your money in a month. And purportedly through cryptocurrency. Even when there was a legitimate cryptocurrency or digital currency platform, some of these are turning out to be under-capitalized.

The most common one is Celsius. Celsius has been locked up and withdrawals have been blocked. So if you have money in there you can’t take it out. It’s not the only one. There have been some other ones that have done this. At the time of this writing, it’s been almost a month since they halted all customer withdrawals. Most people are wondering if they ever see their money again. If you’re halting withdrawals it means that you don’t have enough money to give out to everybody. And the question is where did the money go

If people put money in to buy crypto, that digital currency should be existing somewhere unless some of the money went to pay expenses of that company. At this point everything’s alleged there are no criminal referrals that we know of. According to one of the victims, she said she had, you know six figures worth of digital currency tied up in this account, and they can’t take it out. And the reason they claimed is to stabilize liquidity. What does that mean?

That’s a code word for we got no money and we can’t give it to you cause not enough to go around. And here’s the key. This is key to due diligence on investments and also to vet out potential losses. The victim said It’s such a huge company, and there are so many people that I felt somewhere in the back of my head that I’m not going to lose everything

The size of the company and how many people are there don’t matter. There have been huge companies that have gone bankrupt. We just saw the NRIA real estate investment company go bankrupt with 600 and something billion dollars of investor cash. A lot of this has to do with the debt and leverage some of these companies borrowed a lot against their crypto. And when the crypto is declining and the prices are going down, there’s a credit crunch where you borrow against your crypto holdings. And the underlying value goes down. You might get a margin call from your lender, you might not be able to borrow more. These companies have sprung up to offer services that seem like they’re banking paying interest on deposits making loans and offering high-interest rates, sometimes 20%. Anytime you see a high-interest rate, that’s a red flag. And it may be that these companies weren’t able to pay all their expenses. Running a company is expensive, running a bank is even more expensive. And it looks like it’s traditional finance, but there’s no oversight meaning that they don’t have FDIC and they don’t have SEC regulations monitoring it like they monitor Chase or Wells Fargo as an actual bank.

It looks like this platform [Celsius] at least is considering bankruptcy. They’ve hired attorneys and consultants to look at restructuring or bankruptcy. A lot of people have lost money, some people were saving money to buy a house. Hopefully, the investors had some type of diversification so all their money wasn’t in crypto. Look, there was a big upside, you know when crypto was in five or six thousand dollar range if you had, you know bought two or three then and now it was at 50 you could have hundreds of thousands of dollars in profit as long as you were diversified. And even if it went down you sold some and had some money in other, types of assets (stocks, real estate, cash) but if you had all your money in crypto as a wildly fluctuating asset with big promises you may be in rough shape. Even if you weren’t flat-out scammed if the crypto market is crashing and the leverage is creating a margin call you could be in big trouble.

Wanted: The Truth

Active Intel Investigations is here to help you with every aspect of your investigation, from conducting the investigation to preparing evidence to provide it in court.

Get started with your investigation, browse our video library for investigative resources, or schedule a no-obligation consultation with a licensed private investigator to discuss the specifics of your case.

active intel investigative research services